17. Evaluation of Elderly Financial Stability: Evidence from European Countries

The financial situation of elderly people in Europe has been strongly influenced by demographic trends, changes in macroeconomic situation and reforms of existing pension systems. Increasing lifetime, relatively low replacement rate from the public pension systems and little pension savings or even a lack of them can cause an increasing number of elderly people to be exposed to financial instability or even poverty risk. The present chapter tries to analyse whether the financial situation of elderly people in countries located in two different parts of Europe—Western Europe and Central and Eastern Europe—is similar or not. In this chapter, the authors applied Ward’s method and the k-means method in order to classify the examined countries according to the financial standing of senior citizens. The obtained results allow to indicate countries with similar financial situation of elderly people in 2007, 2010 and 2014 as well as changes in clusters over the analyzed period. Moreover, the variance analysis was applied to indicate the influence of particular variables on the clustering results. The main findings show that the financial situation of the senior citizens in particular European states is very differentiated and changeable; however, over the analyzed period, the financial standing of the senior citizens seems to be the most similar in Italy, Portugal and France, Poland and Hungary, the Czech Republic and Slovakia, Latvia and Lithuania as well as Finland and Sweden.